Slowing petroleum demand and low commodity prices could result in a drop of 21 percent in Canadian oil and gas drilling, said the Petroleum Services Association of Canada on Wednesday.

The association, which represents Canadian oilfield service firms, predicted that the number of wells drilled in the region will drop to 13,500 in 2009 from 17,043 in 2008 due to an economic slowdown which has turned out to be more brutal than originally predicted.

"The numbers represent a pretty significant decrease in activity," said association president Roger Soucy. "The fallout from that is going to be losses of jobs and losses of companies."

Soucy attributed the dramatic deterioration in commodity prices for oil and natural gas to the reduction in demand for all commodities, including oil and gas.

Alberta, the focal point of Canada's oil and gas production will be the worst hit as drilling activity falls by more than a quarter, the association said in its quarterly update.